【正文】 lternative but to seek protection under bankruptcy. And it isn39。t alone: A recent article in The New York Times identifies Nordstrom, Ethan Alien Interiors, and Gateway as businesses in peril as a result of the current economic situation. The list will only grow. In addition, accounting irregularities and the overstating of profits have also taken their toll on a number of businesses including Enron, Global Crossings, and Adelphia Communications.The current economic conditions, unfortunately, aren39。t likely to resolve themselves in the near future. The Federal Reserve has repeatedly reduced rates, and the federal government has infused massive amounts of capital into the economy through tax cuts and bailout funding. These stopgap measures that have served well to fire up the economy in the past haven39。t produced tangible results.WHAT YOU CAN DO TODAY Make no mistake about it, in these difficult times the primary job of the person responsible for the administration of credit and collections is to ensure that funds are collected as close to the terms of the obligation as possible. There should never be any doubt as to why this task is critical to the wellbeing of your organization. Your customers have an obligation to pay within the terms of the agreement, and it39。s the job of the manager of customer receivables to make sure that this obligation is met.The receivables manager is confronted with doing a fine balancing act between managing receivables while satisfying counter philosophies of increasing revenues in a down economy and being more restrictive in credit granting as a hedge against the rise in business failures. Needless to say, restricting credit to marginal customers is going to negatively impact revenues, while relaxing credit terms to marginal customers will have a positive impact on revenues but will negatively impact receivables turn and lead to an increase in bad debts. This situation presents a major challenge to the corporate credit department because today39。s credit professionals are burdened with the responsibility of maximizing revenues for their business unit while containing or minimizing losses.Receivables management requires the ability to control the flow of inventory, determine what constitutes a worthy credit risk, and administer systems that streamline the ordertocash process. In order to do these well, you must address the following areas: procedures for review and extension of credit, methods to automate, performance measurement, and an efficient reporting system. Focusing on best practices will help maximize profits and minimize losses.Implement Procedures You need to establish procedures for review and extension of credit to attain corporate sales objectives while at the same time limiting potential bad debts to a level within the constraints prescribed by corporate fiscal policy. This means a credit policy must be in place. The credit policy is governed largely by the objectives of the business. How best to acplish these goals depends on the application of good business sense and a bination of factors peculiar to the business and its respective industry. You should consider the following points when establishing credit policy and procedures: Nature and size of the business, Overall pany objectives, Classes of customers, Competitive conditions, and Current business conditions.There are four basic types of credit policies. For details on each, see Choosing the Right Type of Credit Policy, p. 45.Careful consideration of the advantages and disadvantages of each type of policy should help in choosing a good working credit policy for a particular business. Any policy must be somewhat flexible, but you should maintain a firm, businesslike attitude in the relationships with both the sales organization and customers. The terms of sale should be sound, practical, petitive, and clearly expressed, and the credit period should be clearly stated and adhered to as closely as possible.Receivables managers who are most successful at maintaining equilibrium between ensuring receivables turn while maximizing revenue potential will likely maneuver their pany into a very petitive position within its industry.Automate You39。ll want to adopt methods to vigilantly monitor each account within the receivables portfolio in order to identify those posing the greatest risk. Automation is the answer here. The rapid advance in riskassessment software has resulted in sophisticated and affordable PCbased software that screens entire customer portfolios in minutes and isolates those businesses that have the potential to fail. In the past, screening thousands of customers would have required a substantial number of analysts.Establish Performance Measures You should also adopt a set of performance measures that monitor pliance with the policies. By design, these measures should examine all aspects of the ordertocash process to ensure maximum efficiency and turn of receivables dollars. Meaningful measures must do the following: Fill the need of a specific objective, Be pared to a standard or it has no meaning, Be consistent, Be used to take action, Provide a benefit, and Be municated in association with the standard. We should remember that what gets measured gets done. If a measure doesn39。t acplish a purpose, don39。t use it. The measure should be designed to support the organizational goals. Standards should be established in accordance with past organizational or industry values and trends in order to facilitate internal monthtomonth or yeartoyear parison or parison to industry standards. In a tight economy, workingcapital turn is a key ponent. Investors and lenders want panies with a good credit rating and conservative, liquid balance sheets. To see how you pare, you39。ll want to benchmark your business within its respective industry to ensure a sound petitive position. Measuring your position is o